15 ms·

Yes we want raises that beat inflation. But I think what we really want is a bigger share of the profits a company makes without them raising prices. Unfortunat

Yes we want raises that beat inflation. But I think what we really want is a bigger share of the profits a company makes without them raising prices. Unfortunately, Wall Street demands ever growing profit margins and revenues. Meaning that whenever wage increase, they simply do their part to cancel them out by raising their prices as well. I get that some companies have slim profit margins and can't do this easily, but others can clearly choose to pay their employees more. They just choose not to. This is an ideological thing and not an impossibility. See Gravity Payments.

rr888 4y ago
Be careful on this. Yes some FANGs make a lot of money but most tech companies lose every year. You want to give up wages to help pay the deficit?
- grapeskin 4y ago
  I think the awareness of that reality would turn a lot of heads and make many more developers think, “wait, is this a bubble?” instead of developers jumping from 300k to 400k VC funded niche simple-website-as-an-app jobs with 10 to 500 employee growth in 2 years, saying “dude trust me this company has a future”
  - adventured 4y ago
    A zillion 'tech' companies with massive scale operating losses (hey would K8s help with the scaling?!?) are about to find out what it's like when the financing spigots get turned off. Their employees will definitely take a large share of the hit. In the public version of that you can already see how that's working out, as their stocks have routinely collapsed by 70-90% over the past year. Those companies will either have to sell themselves off for a fraction of what they were formerly worth, slash expenditures heavily (ie fire employees and cut expansion plans), or heavily dilute to raise some funds and pray the beating stops before they run out of money. The crash that the pandemic should have brought forth (and nearly did), is here now. They temporarily papered over the disaster, and the bill has arrived regardless as it always does. Some examples: Snowflake: $715m operating loss on $1.2b in sales (lol) | Unity Software: $591m operating loss on $1.2b in sales | Roblox: $511m operating loss on $2b in sales | Palantir: $336m operating loss on $1.6b in sales | Robinhood: $2b operating loss on $1.6b in sales (lol) | Affirm: $632m operating loss on $1.2b in sales | SoFi: $411m pre-tax loss on $1.1b in sales | Twilio: $936m operating loss on $3b in sales | Uber: $2.7b op loss on $21b sales | Lyft: $865m op loss on $3.4b sales | UiPath: $500m op loss on $892m sales | Asana: $265m op loss on $378m in sales (lol) | Lemonade: $258m pre-tax loss on $149m sales (lol) | Fastly: $232m op loss on $371m in sales And so on. Some of these loss vs sales ratios very much resemble the excesses of the dotcom bubble. When the music stops (as it has), the losses become a lot more difficult to manage, the market smashes the stocks, customers pull back in recessionary environments, losses get even worse, companies have to slash and burn, and a lot of things go sideways in that hurricane. Companies like Twilio have seen their stocks implode by 80% for good reason, they're bleeding very badly, their businesses are unsustainable as is. Lyft is a dead company walking, they have to sell themselves off if things don't promptly turn around in the economy and market (which appears unlikely); they're 75% below the IPO levels, it's a disaster for nearly all the shareholders (including employees) that have held. How much is eg Asana really worth when their business consists of $265m in op losses vs $378m in sales? It's a joke. Discount it by 90-95% from the top and that's probably a reasonable start to the grinddown ($145 to $18 so far). How about Fastly? They're dead. They probably have no choice other than to sell themselves off. For fiscal 2021 they added $64m in sales and $112m in operating losses to get that. Aggressively slam the brakes and their stronger competitors will just eat their business, don't slam the brakes and they're dead. $64 to $10 so far on the stock. They're dinner for Cloudflare, Amazon, IBM, someone. These guys are all seriously fucked in one way or another. Those op losses vs sales are comical. Be sure to say hello to the brick wall you're about to slam into. They have several bad options to choose from to start dealing with their epic scale losses (and if they don't, the market will just smash their stocks that much more), including praying that the bad things just pretty please stop happening.
    - bombcar 4y ago
      Adding blank lines between the companies would format it in a rough table. But yeah, these are nuts and almost all these companies were dependent on "stock go up" and now the chickens have come home to roost. They'll all be acquired for pennies on the dollar by big players (though the really big ones like Uber might survive by massive purges). Roblox and Robinhood are the most amusing, how can you screw up a money spigot so badly?
      - adventured 4y ago
        I dislike the extra spacing that HN requires for that style. And unfortunately I'm not aware of any way to do line to next line without the surplus spacing. I have always thought it would be a rather useful formatting option here.
        bombcar 4y ago
        I've used the code option at times [3487]: Text after a blank line that is indented by two or more spaces is reproduced verbatim. (This is intended for code.) [3487] https://news.ycombinator.com/formatdoc https://news.ycombinator.com/formatdoc
    - deleted 4y ago
      [deleted]
    - deleted 4y ago
      [deleted]
- oragnediscussy 4y ago
  Of course there are a lot of big FAANG type companies, and there are a lot of startups with VC funding. I used to work for Google and now I’ve run my own company for the last 10 years without VC funding. I imagine there are many many countless companies similar to mine. I focus on growth and we never have a ton of money. If we get more money we put it into our current and expanding workforce. We do keep some money in the bank but only so we can make sure our company doesn’t fail at some point. But companies are fragile things, if we lose enough employees and can’t get new employees and train them fast enough we probably fail. If we raise our salaries too high and can’t get enough revenue in return we fail. If we have a sales guy who we pay $70k base with $150k commission, then he leaves for $140k base job and we have to in turn hire a $130k base salary guy with $200k commission - what do we do? (This is a real world example) - well we now have one sales guy for almost the same price as we were paying two before. Basically we need to make more money or let people go. A single sales guy can only have so many conversations so we probably need to raise our cost of our product. Which assuming our customers even accept it, will increase their costs and it just keeps repeating down the line. The current type environment is not kind to my type of company and it definitely will cause a lot of companies to fail. We have an amazing product with great demand and i think that’s what has saved us, but please imagine a company that is similar to mine. We try everything we can do to retain our employees, pretty much every dollar we make goes into employees since our product is software. When we had bad years I set my salary at $40k since i wanted the company to survive and we were still small and it made a difference. A ‘normal’ company like mine is totally restrained by cash flow, its a pretty simple equation. When you start having costs increase (i.e. salary) you have to balance it out somehow with more revenue somehow or reduced costs. A gradual increase is always better so we can start planning for it, get loans, get investment, gradually increase our price. Price shocks and huge changes are never easy to handle. I believe companies like mine are doing something good - innovating and creating good products and providing a much better service to our customers than Google and others can do by the virtue of us still being small and nimble and customer focused.
zdragnar 4y ago
I'll be honest, having worked at companies with profit sharing, you're better off taking the raise unless you're working for commission, and even then now is a rough time to be on commission. If you can afford to risk your income on your company's fortunes, start your own or join a startup with a founder who seems trustworthy. For me and most people, predictable income is much better than risky equity.
- ryanbrunner 4y ago
  Joining a startup isn't a good way to share in a companies upside unless you're one of the first few employees. You only share in the upside of wildly successful companies, and even then it's many years delayed from that success and has the potential to be whittled away by preferred rounds ahead of you, executive carve outs, etc.
- sofixa 4y ago
  Profit sharing doesn't necessarily mean equity. It can be a percentage of profits split between all employees. Of course that, like equity, doesn't substitute a decent salary, it just complements in a way that gives positive incentives.
  - zdragnar 4y ago
    Whether equity or paid out monthly, it's variable income that most people can't count on. When you're in a big enough company that you individually can't feel yourself moving the needle, the end result is that it's not much of an incentive. This is especially true once the company gets over a few hundred employees. Source: Have worked for profit sharing companies before.
- horsawlarway 4y ago
  I don't really disagree with you, but I also don't think you're really responding to what the OP was saying. He isn't saying: We want a profit sharing agreement instead of salary. He's saying: Extra salary that is immediately covered by the company raising the cost of their goods (rather than say - reducing executive pay, removing middle managers, or making less money for shareholders) doesn't get us where we need to go. Because if the cost of buying all your goods is going up in direct relation to the raise in salary, (and this is happening across the market: inflation) - you aren't really getting a fucking raise at all. You're just floating. The answer instead (at least in my opinion) is to change tact on how companies prioritize. 1. Workers need to be valued above shareholders (drive long term growth rather than sacrificing the golden duck for next quarter's profit) 2. Discrepancy between CEO and average pay needs to be curtailed - the current balance is driving a huge wedge into the relationship between a company and its employees. 3. Remove the inappropriate leverage that companies wield by controlling your healthcare/medical insurance costs 4. Remove pools of labor that are self-defeating: Jobs that pay so little the employee must be subsidized by government programs to live (think walmart/uber/etc) The best course of action here is likely labor movements (unions)
bayesian_horse 4y ago
This is not true. If it were, then inflation would run away. Prices influence demand, so companies can't just raise prices whenever they want. But capital in itself also has a relationship between supply, demand and price, often called rent-seeking behavior. If you are interested in this kind of topic, look into microeconomics, then macroeconomics.
- mrtranscendence 4y ago
  Supposing that a company could always exactly offset rising costs by raising prices assumes that such a company was not setting an optimal price in the first place. If they could increase profits by raising prices, they would have done so already. Low labor costs aren't what's keeping McDonalds from charging $15 for a cheeseburger, it's the fact that nobody would buy a cheeseburger for $15.
rgersten 4y ago
This is spot on. I think there is a nuance across industries that is often missed here too. Certain industries really can’t raise prices or wages without tanking the business. Restaurants, mechanics, doctors, etc are often operating on razor thin margins with prices set by the market. For medical/dental/therapy their prices are often set by insurance reimbursement rates that haven’t kept up with inflation. The flip side is like you said, companies raking in record profits with massive cash on hand. They could easily afford to share more with employees and would probably benefit from a happier and more invested work force. The stratification between C-level and everyone else is higher than it’s ever been.
- pydry 4y ago
  Restaurants largely operate on razor thin margins because the surplus value is taken by the landlord. Similarly for McDonalds corporate often takes the surplus value & is increasingly the landlord too. So McDonalds franchisees cant easily afford a payrise from profit margins but McDonalds as a whole most certainly can. This is also why the restaurant industry minimum wage hikes havent meant any fewer restaurants anywhere.
  - commandlinefan 4y ago
    > the surplus value is taken by the landlord Hm - interesting theory. The landlord does have some expenses, though: upkeep on the property and taxes, as well as some bit of "float" for times when the property is vacant. There's a definable "margin" there, too, but I wouldn't know where to look to find out what.
    - nybble41 4y ago
      > There's a definable "margin" there, too, but I wouldn't know where to look to find out what. Not enough of one to make becoming a landlord a guaranteed way to earn an easy profit, or everyone would do it. Lack of startup capital wouldn't be an issue either—banks would be happy to front the cost if you can prove the venture will succeed well enough to pay them back with interest.
nabla9 4y ago
This is good start for principled discussion using relevant data. First data point: "Share of Labour Compensation in GDP at Current National Prices for United States" (1950 -) https://fred.stlouisfed.org/series/LABSHPUSA156NRUG https://fred.stlouisfed.org/series/LABSHPUSA156NRUG Second data point: "Employment Cost Index: Total compensation: All Civilian" (2001- ) https://fred.stlouisfed.org/series/ECIALLCIV https://fred.stlouisfed.org/series/ECIALLCIV Discuss.
a4a4a4a4 4y ago
Is Gravity Payments actually paying well, or is their CEO just very actively marketing on LinkedIn? (I blocked him last year, I find him and his posts annoying) https://www.payscale.com/research/US/Employer=Gravity_Payments/Salary https://www.payscale.com/research/US/Employer=Gravity_Paymen... The average at Gravity Payments is $91k/year and the average across the US is around $88k? https://www.payscale.com/research/US/Job=Software_Engineer/Salary https://www.payscale.com/research/US/Job=Software_Engineer/S...
randunel 4y ago
> But I think what we really want is a bigger share of the profits a company makes without them raising prices. Only as long as you're willing to have the same share of the losses, too, but most aren't. Of course everyone wants to get max(salary, share of profits, commission) when the company registers losses, and sum(salary, share of profits, commision) only when the company registers profits, but I just don't see such a thing ever working.
- newsclues 4y ago
  Most works share disproportionately in the losses… increased workloads, layoffs, stagnant salaries, etc. Remember it’s common for executives to get bonuses when they lay off the workers.
  - Matticus_Rex 4y ago
    Laying off workers is often the right thing to do for the health of the business. Companies are not make-work schemes, designed to employ as many people as possible, and shouldn't be. They're there to provide value for customers, as defined by customers demonstrating that they value the thing the company provides more than the money they give up to get that thing, and constrained by the fact that the business itself has to be profitable to be sustainable and keep providing that value. That sustainability includes the capital needed from investors to keep the business producing and innovating. There's competition for that capital (and there should be!), so if returns are higher elsewhere, that broadly means the alternate use of capital is providing value to customers more efficiently. If someone at the company identifies a set of inefficiencies in producing value for customers, and remedying that involves laying off a bunch of people, but ends in providing that value more successfully, that person has been responsible for a lot of value creation.
    - JaimeThompson 4y ago
      The executives who are responsible for all the excess hiring should also be removed for their failures as well so they can be held responsible for their mistakes.
trey-jones 4y ago
These capitalist demands affect the morale of workers who don't get compensated fairly. It also makes it much, much more difficult for small businesses without $1B of borrowing power to compete with public companies. This limits competition (sales), which is bad for consumers. It limits competition (hiring) because small businesses simply can't pay (even half of) what a lot of public companies can. So consumers lose. Workers lose. Everybody is stressed out and pissed off. The upper class is oblivious or doesn't care. Another economic dynamic outside of major cities is that housing might be more affordable, but goods and services (mostly) cost the same as anywhere else in a global economy where prices are controlled by the biggest players.
amelius 4y ago
Look for a company that has a profit sharing program. https://en.wikipedia.org/wiki/Profit_sharing https://en.wikipedia.org/wiki/Profit_sharing
skizm 4y ago
Gravity payments raised salaries as a vindictive measure against a co-founder / brother who sued the CEO for taking a salary of $1million, which was way too high for their revenue at the time. Dan Price took all the profits they were making, divided by the number of employees and gave everyone that so the brother would make no money on his equity. This was a way to screw his brother and fend off the lawsuit at the same time. A bunch of senior engineers quit because they did not receive equal pay increases. He also divorced his wife days before increasing his salary from $50k to $1m lol. Guy is a scumbag.
- filoleg 4y ago
  It goes beyond just that. When interviewed about the matter by Bloomberg [0], the CEO lied about the lawsuit timelines, and when he got called out by the interviewer, he repeated the lie and cut the interviewer off. The CEO claims he got sued for raising the salary for all the employees, but the lawsuit against him was served weeks before (and it was for a completely different reason), and he signed it himself. But he claimed he hasnt even heard of the lawsuit before he raised the salaries. Oh, and he pretty much unambiguously abused his wife (Chris Brown style, i.e., pretty violently), but was also super dodgy and aggressive about it with the interviewer. I found that Bloomberg investigation and interview to be pretty in-depth and well done. 0. https://www.bloomberg.com/features/2015-gravity-ceo-dan-price/ https://www.bloomberg.com/features/2015-gravity-ceo-dan-pric...
Aunche 4y ago
Does Dan Price give out any equity to his employees? It sounds like what he's doing is no different than Zuck taking a $1 salary.
nerdponx 4y ago
Worker-owned should be the norm, not the exception!
robertlagrant 4y ago
Some businesses have negative profits. If you want a share in the profits you have to have a share of the losses as well. That's what the bosses do.
- queuebert 4y ago
  Sort of. The bosses have shares that go down in value, but it's not like they are paying into the company from their personal money to balance the books in most cases. (Not that this never happens, but it is rare I bet.)
  - robertlagrant 4y ago
    Many founders will do this directly or indirectly. Most businesses are not tech startups from the last 20 years and don't have access to capital outside of a bank loan to the founder(s).
Gigachad 4y ago
Couldn’t employees buy stocks in the company they work at and receive dividends?

rr888 4y ago

Be careful on this. Yes some FANGs make a lot of money but most tech companies lose every year. You want to give up wages to help pay the deficit?

grapeskin 4y ago
I think the awareness of that reality would turn a lot of heads and make many more developers think, “wait, is this a bubble?” instead of developers jumping from 300k to 400k VC funded niche simple-website-as-an-app jobs with 10 to 500 employee growth in 2 years, saying “dude trust me this company has a future”
- adventured 4y ago
  A zillion 'tech' companies with massive scale operating losses (hey would K8s help with the scaling?!?) are about to find out what it's like when the financing spigots get turned off. Their employees will definitely take a large share of the hit. In the public version of that you can already see how that's working out, as their stocks have routinely collapsed by 70-90% over the past year. Those companies will either have to sell themselves off for a fraction of what they were formerly worth, slash expenditures heavily (ie fire employees and cut expansion plans), or heavily dilute to raise some funds and pray the beating stops before they run out of money. The crash that the pandemic should have brought forth (and nearly did), is here now. They temporarily papered over the disaster, and the bill has arrived regardless as it always does. Some examples: Snowflake: $715m operating loss on $1.2b in sales (lol) | Unity Software: $591m operating loss on $1.2b in sales | Roblox: $511m operating loss on $2b in sales | Palantir: $336m operating loss on $1.6b in sales | Robinhood: $2b operating loss on $1.6b in sales (lol) | Affirm: $632m operating loss on $1.2b in sales | SoFi: $411m pre-tax loss on $1.1b in sales | Twilio: $936m operating loss on $3b in sales | Uber: $2.7b op loss on $21b sales | Lyft: $865m op loss on $3.4b sales | UiPath: $500m op loss on $892m sales | Asana: $265m op loss on $378m in sales (lol) | Lemonade: $258m pre-tax loss on $149m sales (lol) | Fastly: $232m op loss on $371m in sales And so on. Some of these loss vs sales ratios very much resemble the excesses of the dotcom bubble. When the music stops (as it has), the losses become a lot more difficult to manage, the market smashes the stocks, customers pull back in recessionary environments, losses get even worse, companies have to slash and burn, and a lot of things go sideways in that hurricane. Companies like Twilio have seen their stocks implode by 80% for good reason, they're bleeding very badly, their businesses are unsustainable as is. Lyft is a dead company walking, they have to sell themselves off if things don't promptly turn around in the economy and market (which appears unlikely); they're 75% below the IPO levels, it's a disaster for nearly all the shareholders (including employees) that have held. How much is eg Asana really worth when their business consists of $265m in op losses vs $378m in sales? It's a joke. Discount it by 90-95% from the top and that's probably a reasonable start to the grinddown ($145 to $18 so far). How about Fastly? They're dead. They probably have no choice other than to sell themselves off. For fiscal 2021 they added $64m in sales and $112m in operating losses to get that. Aggressively slam the brakes and their stronger competitors will just eat their business, don't slam the brakes and they're dead. $64 to $10 so far on the stock. They're dinner for Cloudflare, Amazon, IBM, someone. These guys are all seriously fucked in one way or another. Those op losses vs sales are comical. Be sure to say hello to the brick wall you're about to slam into. They have several bad options to choose from to start dealing with their epic scale losses (and if they don't, the market will just smash their stocks that much more), including praying that the bad things just pretty please stop happening.
  - bombcar 4y ago
    Adding blank lines between the companies would format it in a rough table. But yeah, these are nuts and almost all these companies were dependent on "stock go up" and now the chickens have come home to roost. They'll all be acquired for pennies on the dollar by big players (though the really big ones like Uber might survive by massive purges). Roblox and Robinhood are the most amusing, how can you screw up a money spigot so badly?
    - adventured 4y ago
      I dislike the extra spacing that HN requires for that style. And unfortunately I'm not aware of any way to do line to next line without the surplus spacing. I have always thought it would be a rather useful formatting option here.
      - bombcar 4y ago
        I've used the code option at times [3487]: Text after a blank line that is indented by two or more spaces is reproduced verbatim. (This is intended for code.) [3487] https://news.ycombinator.com/formatdoc https://news.ycombinator.com/formatdoc
  - deleted 4y ago
    [deleted]
  - deleted 4y ago
    [deleted]
oragnediscussy 4y ago
Of course there are a lot of big FAANG type companies, and there are a lot of startups with VC funding. I used to work for Google and now I’ve run my own company for the last 10 years without VC funding. I imagine there are many many countless companies similar to mine. I focus on growth and we never have a ton of money. If we get more money we put it into our current and expanding workforce. We do keep some money in the bank but only so we can make sure our company doesn’t fail at some point. But companies are fragile things, if we lose enough employees and can’t get new employees and train them fast enough we probably fail. If we raise our salaries too high and can’t get enough revenue in return we fail. If we have a sales guy who we pay $70k base with $150k commission, then he leaves for $140k base job and we have to in turn hire a $130k base salary guy with $200k commission - what do we do? (This is a real world example) - well we now have one sales guy for almost the same price as we were paying two before. Basically we need to make more money or let people go. A single sales guy can only have so many conversations so we probably need to raise our cost of our product. Which assuming our customers even accept it, will increase their costs and it just keeps repeating down the line. The current type environment is not kind to my type of company and it definitely will cause a lot of companies to fail. We have an amazing product with great demand and i think that’s what has saved us, but please imagine a company that is similar to mine. We try everything we can do to retain our employees, pretty much every dollar we make goes into employees since our product is software. When we had bad years I set my salary at $40k since i wanted the company to survive and we were still small and it made a difference. A ‘normal’ company like mine is totally restrained by cash flow, its a pretty simple equation. When you start having costs increase (i.e. salary) you have to balance it out somehow with more revenue somehow or reduced costs. A gradual increase is always better so we can start planning for it, get loans, get investment, gradually increase our price. Price shocks and huge changes are never easy to handle. I believe companies like mine are doing something good - innovating and creating good products and providing a much better service to our customers than Google and others can do by the virtue of us still being small and nimble and customer focused.

zdragnar 4y ago

I'll be honest, having worked at companies with profit sharing, you're better off taking the raise unless you're working for commission, and even then now is a rough time to be on commission. If you can afford to risk your income on your company's fortunes, start your own or join a startup with a founder who seems trustworthy. For me and most people, predictable income is much better than risky equity.

ryanbrunner 4y ago
Joining a startup isn't a good way to share in a companies upside unless you're one of the first few employees. You only share in the upside of wildly successful companies, and even then it's many years delayed from that success and has the potential to be whittled away by preferred rounds ahead of you, executive carve outs, etc.
sofixa 4y ago
Profit sharing doesn't necessarily mean equity. It can be a percentage of profits split between all employees. Of course that, like equity, doesn't substitute a decent salary, it just complements in a way that gives positive incentives.
- zdragnar 4y ago
  Whether equity or paid out monthly, it's variable income that most people can't count on. When you're in a big enough company that you individually can't feel yourself moving the needle, the end result is that it's not much of an incentive. This is especially true once the company gets over a few hundred employees. Source: Have worked for profit sharing companies before.
horsawlarway 4y ago
I don't really disagree with you, but I also don't think you're really responding to what the OP was saying. He isn't saying: We want a profit sharing agreement instead of salary. He's saying: Extra salary that is immediately covered by the company raising the cost of their goods (rather than say - reducing executive pay, removing middle managers, or making less money for shareholders) doesn't get us where we need to go. Because if the cost of buying all your goods is going up in direct relation to the raise in salary, (and this is happening across the market: inflation) - you aren't really getting a fucking raise at all. You're just floating. The answer instead (at least in my opinion) is to change tact on how companies prioritize. 1. Workers need to be valued above shareholders (drive long term growth rather than sacrificing the golden duck for next quarter's profit) 2. Discrepancy between CEO and average pay needs to be curtailed - the current balance is driving a huge wedge into the relationship between a company and its employees. 3. Remove the inappropriate leverage that companies wield by controlling your healthcare/medical insurance costs 4. Remove pools of labor that are self-defeating: Jobs that pay so little the employee must be subsidized by government programs to live (think walmart/uber/etc) The best course of action here is likely labor movements (unions)

bayesian_horse 4y ago

This is not true. If it were, then inflation would run away. Prices influence demand, so companies can't just raise prices whenever they want. But capital in itself also has a relationship between supply, demand and price, often called rent-seeking behavior. If you are interested in this kind of topic, look into microeconomics, then macroeconomics.

mrtranscendence 4y ago
Supposing that a company could always exactly offset rising costs by raising prices assumes that such a company was not setting an optimal price in the first place. If they could increase profits by raising prices, they would have done so already. Low labor costs aren't what's keeping McDonalds from charging $15 for a cheeseburger, it's the fact that nobody would buy a cheeseburger for $15.

rgersten 4y ago

This is spot on. I think there is a nuance across industries that is often missed here too. Certain industries really can’t raise prices or wages without tanking the business. Restaurants, mechanics, doctors, etc are often operating on razor thin margins with prices set by the market. For medical/dental/therapy their prices are often set by insurance reimbursement rates that haven’t kept up with inflation. The flip side is like you said, companies raking in record profits with massive cash on hand. They could easily afford to share more with employees and would probably benefit from a happier and more invested work force. The stratification between C-level and everyone else is higher than it’s ever been.

pydry 4y ago
Restaurants largely operate on razor thin margins because the surplus value is taken by the landlord. Similarly for McDonalds corporate often takes the surplus value & is increasingly the landlord too. So McDonalds franchisees cant easily afford a payrise from profit margins but McDonalds as a whole most certainly can. This is also why the restaurant industry minimum wage hikes havent meant any fewer restaurants anywhere.
- commandlinefan 4y ago
  > the surplus value is taken by the landlord Hm - interesting theory. The landlord does have some expenses, though: upkeep on the property and taxes, as well as some bit of "float" for times when the property is vacant. There's a definable "margin" there, too, but I wouldn't know where to look to find out what.
  - nybble41 4y ago
    > There's a definable "margin" there, too, but I wouldn't know where to look to find out what. Not enough of one to make becoming a landlord a guaranteed way to earn an easy profit, or everyone would do it. Lack of startup capital wouldn't be an issue either—banks would be happy to front the cost if you can prove the venture will succeed well enough to pay them back with interest.

nabla9 4y ago

This is good start for principled discussion using relevant data. First data point: "Share of Labour Compensation in GDP at Current National Prices for United States" (1950 -) https://fred.stlouisfed.org/series/LABSHPUSA156NRUG https://fred.stlouisfed.org/series/LABSHPUSA156NRUG Second data point: "Employment Cost Index: Total compensation: All Civilian" (2001- ) https://fred.stlouisfed.org/series/ECIALLCIV https://fred.stlouisfed.org/series/ECIALLCIV Discuss.

a4a4a4a4 4y ago

Is Gravity Payments actually paying well, or is their CEO just very actively marketing on LinkedIn? (I blocked him last year, I find him and his posts annoying) https://www.payscale.com/research/US/Employer=Gravity_Payments/Salary https://www.payscale.com/research/US/Employer=Gravity_Paymen... The average at Gravity Payments is $91k/year and the average across the US is around $88k? https://www.payscale.com/research/US/Job=Software_Engineer/Salary https://www.payscale.com/research/US/Job=Software_Engineer/S...

randunel 4y ago

> But I think what we really want is a bigger share of the profits a company makes without them raising prices. Only as long as you're willing to have the same share of the losses, too, but most aren't. Of course everyone wants to get max(salary, share of profits, commission) when the company registers losses, and sum(salary, share of profits, commision) only when the company registers profits, but I just don't see such a thing ever working.

newsclues 4y ago
Most works share disproportionately in the losses… increased workloads, layoffs, stagnant salaries, etc. Remember it’s common for executives to get bonuses when they lay off the workers.
- Matticus_Rex 4y ago
  Laying off workers is often the right thing to do for the health of the business. Companies are not make-work schemes, designed to employ as many people as possible, and shouldn't be. They're there to provide value for customers, as defined by customers demonstrating that they value the thing the company provides more than the money they give up to get that thing, and constrained by the fact that the business itself has to be profitable to be sustainable and keep providing that value. That sustainability includes the capital needed from investors to keep the business producing and innovating. There's competition for that capital (and there should be!), so if returns are higher elsewhere, that broadly means the alternate use of capital is providing value to customers more efficiently. If someone at the company identifies a set of inefficiencies in producing value for customers, and remedying that involves laying off a bunch of people, but ends in providing that value more successfully, that person has been responsible for a lot of value creation.
  - JaimeThompson 4y ago
    The executives who are responsible for all the excess hiring should also be removed for their failures as well so they can be held responsible for their mistakes.

trey-jones 4y ago

These capitalist demands affect the morale of workers who don't get compensated fairly. It also makes it much, much more difficult for small businesses without $1B of borrowing power to compete with public companies. This limits competition (sales), which is bad for consumers. It limits competition (hiring) because small businesses simply can't pay (even half of) what a lot of public companies can. So consumers lose. Workers lose. Everybody is stressed out and pissed off. The upper class is oblivious or doesn't care. Another economic dynamic outside of major cities is that housing might be more affordable, but goods and services (mostly) cost the same as anywhere else in a global economy where prices are controlled by the biggest players.

amelius 4y ago

Look for a company that has a profit sharing program. https://en.wikipedia.org/wiki/Profit_sharing https://en.wikipedia.org/wiki/Profit_sharing

skizm 4y ago

Gravity payments raised salaries as a vindictive measure against a co-founder / brother who sued the CEO for taking a salary of $1million, which was way too high for their revenue at the time. Dan Price took all the profits they were making, divided by the number of employees and gave everyone that so the brother would make no money on his equity. This was a way to screw his brother and fend off the lawsuit at the same time. A bunch of senior engineers quit because they did not receive equal pay increases. He also divorced his wife days before increasing his salary from $50k to $1m lol. Guy is a scumbag.

filoleg 4y ago
It goes beyond just that. When interviewed about the matter by Bloomberg [0], the CEO lied about the lawsuit timelines, and when he got called out by the interviewer, he repeated the lie and cut the interviewer off. The CEO claims he got sued for raising the salary for all the employees, but the lawsuit against him was served weeks before (and it was for a completely different reason), and he signed it himself. But he claimed he hasnt even heard of the lawsuit before he raised the salaries. Oh, and he pretty much unambiguously abused his wife (Chris Brown style, i.e., pretty violently), but was also super dodgy and aggressive about it with the interviewer. I found that Bloomberg investigation and interview to be pretty in-depth and well done. 0. https://www.bloomberg.com/features/2015-gravity-ceo-dan-price/ https://www.bloomberg.com/features/2015-gravity-ceo-dan-pric...

Aunche 4y ago

Does Dan Price give out any equity to his employees? It sounds like what he's doing is no different than Zuck taking a $1 salary.

nerdponx 4y ago

Worker-owned should be the norm, not the exception!

robertlagrant 4y ago

Some businesses have negative profits. If you want a share in the profits you have to have a share of the losses as well. That's what the bosses do.

queuebert 4y ago
Sort of. The bosses have shares that go down in value, but it's not like they are paying into the company from their personal money to balance the books in most cases. (Not that this never happens, but it is rare I bet.)
- robertlagrant 4y ago
  Many founders will do this directly or indirectly. Most businesses are not tech startups from the last 20 years and don't have access to capital outside of a bank loan to the founder(s).

Gigachad 4y ago

Couldn’t employees buy stocks in the company they work at and receive dividends?